Commonwealth Australian Industry Participation (CAIP) policy

Commonwealth AIP policy aims to leverage Australian Government spending to maximise Australian industry participation, capability and jobs. We administer it in line with the state, territory and federal governments' Australian Industry Participation (AIP) National Framework.

It applies to Australian Government procurements, grants, investments and payments of $20 million or more.

  • Government entities that fund the projects are responsible for applying this policy.
  • Companies that receive these funds are responsible for meeting CAIP requirements. We refer to these companies as funding recipients.

CAIP plans

Under this policy, funding recipients may need a Commonwealth AIP plan.

A CAIP plan ensures Australian industry have:

  • full, fair and reasonable opportunity to bid to supply key good and services for the project
  • the opportunity to show their capabilities when the company purchases or subcontracts these goods and services.

A CAIP plan outlines how a project will provide opportunity to Australian industry. However, it does not mandate that a project must use Australian industry.

Full, fair and reasonable opportunity

These principles explain the policy intent in more detail:

  • Full: Australian industry has the same opportunity as other global supply chain partners to participate in all aspects of an investment project. For example, by supplying design, engineering, project management, professional services or IT architecture.
  • Fair: Australian industry has the same opportunity as global suppliers to compete on investment projects on an equal and transparent basis. This includes having reasonable time to tender.
  • Reasonable: Tenders are free from non-market burdens that might rule out Australian industry. Their structure gives Australian industries the opportunity to participate in investment projects.

CAIP plan criteria

A project may or may not need a CAIP plan depending on:

  • the type or amount of funding
  • what the funding is being used for
  • who can supply goods and services for the project
  • whether the project is being carried out in Australia or internationally. 

A project may need a CAIP plan if it is receiving:

Funding recipients can also voluntarily complete a CAIP plan to show commitment to local industry participation, even if the project doesn’t meet the above criteria.

Get in touch with the CAIP team for help or more information.

A project may not need a CAIP plan if:

  • The total tender value of the grant or project (including extension options) is less than $20 million
  • The panel arrangement is worth $20 million or more but no single contract is worth $20 million or more.
  • The grant program is worth $20 million or more but no individual grant is worth $20 million or more.
  • Australian suppliers deliver all the work.
  • There are no subcontracting opportunities.
  • All subcontracting opportunities to provide goods and services can only be delivered by international businesses because there’s no Australian industry capability
  • The project already has obligations under a state or territory local industry participation plan that meets CAIP policy requirements.
  • The procurement is subject to the Department of Defence’s Australian Industry Capability (AIC) program.

If the project has a capital expenditure of $500 million or more to establish or upgrade an eligible facility, it may need an AIP plan under the Australian Jobs Act 2013. If an AIP plan is in place, the project will not need a CAIP plan. Read more about AIP plan criteria.

Some types of domestic projects may not need a CAIP plan. These include:

  • office leases
  • leases or lease renewals for government buildings
  • labour hire including training, physical filing and moving services
  • managing or cleaning the environment
  • scholarships or bursaries
  • research, for example medical research
  • investments related to equity and debt funding
  • direct procurement where no subcontracting opportunities exist
  • subsidies for wages, such as Medical Research Future Fund grants
  • management services for government buildings, such as cleaning services
  • direct procurement of employment or professional services, for example temporary employment services
  • clinical trials that don’t have an approach to market.

Some types of international projects are unlikely to require a CAIP plan. These include:

  •  goods and services that must be delivered outside Australia
  • overseas activities that are unlikely to attract Australian industry, for example a  renovation of government properties held overseas.

CAIP plan process

  • 1. Self-assessment

     The government entity completes the self-assessment to determine if a plan is required.

  • 2. Submission

    The funding recipient submits a plan.

  • 3. Implementation

    The funding recipient implements the plan.

  • 4. Reporting

    The funding recipient reports regularly to the government entity.

Government entity responsibilities

When a government entity is planning a procurement, grant, investment or payment, they should complete the self-assessment form (SAF) to find out if a CAIP plan is required. This also notifies our team of the project. It is important to complete the SAF even if the project is unlikely to need a CAIP plan.

Once we have confirmed that a CAIP plan is required, you should:

  • initiate a CAIP plan on behalf of your funding recipient
  • manage the CAIP plan implementation.

  1. Complete the SAF to work out if the funding recipient needs a CAIP plan. You can do this when you:
    • have identified the funding recipient.
    • know any proposed subcontracting arrangements.
  2. We’ll get back to you if we have questions or if we need more information. We’ll also confirm next steps.
  3. To help you plan your project, we can provide model clauses to include in:
    • tender documentation
    • grant guidelines
    • funding agreements or contracts.

This will help you maximise opportunities for Australian businesses to participate in the project.

If a CAIP plan is required, it must be approved and in place before:

  • a contract or funding agreement is executed
  • financial close for investments is achieved.

Read more about the Department of Finance’s procurement connected policies and grant connected policies.

  1. You initiate the CAIP plan online using the SmartForm system. We give you a link and user guide to help you do this.
  2. The funding recipient completes the plan.
  3. We review and approve the plan.

Review the funding recipient’s implementation reports to evaluate their actions against their plans. You can do this in SmartForm.

If required, we can assist you to review the implementation reports before you approve them.

Funding recipient responsibilities

Funding recipients will be notified by the relevant government entity if their project needs a CAIP plan. 

If a plan is needed, the funding recipient should:

  • complete and submit a draft CAIP plan for approval
  • implement the CAIP plan by:
    • submitting an implementation report
    • keeping detailed records.

The government entity initiates the CAIP plan online using the SmartForm system. You, the funding recipient, will receive:

  • a link to open the plan
  • a CAIP plan user guide.

Once a draft plan is complete, you should:

  1. Schedule a consultation with us before submitting the CAIP plan for approval. (This is optional. It allows us to provide feedback up front instead of after a plan has been submitted.)
  2. Submit the CAIP plan using SmartForm.
  3. We assess the plan's actions against CAIP policy requirements. If we need you to make changes, we’ll provide feedback in 10 business days.
  4. Revise the draft CAIP plan using feedback we have provided and resubmit. It may take multiple submissions to finalise the plan.

As the funding recipient, you must describe the actions you’ll take to give full, fair and reasonable opportunity to Australian industry to participate in the project.

You must include:

  • opportunities the project will provide to Australian industry
  • strategies you will use to communicate openly and effectively about opportunities for Australian suppliers to supply goods and services. This may include a publicly accessible website that will provide:
    • general information about the project
    • supply opportunities
    • pre-qualification requirements
    • contact details for supplier enquiries.
  • assessment criteria that shows you will assess suppliers fairly and equally

You must also explain how you intend to:

  • develop an understanding of Australian industry capability before approaching the market for goods and services
  • give feedback to unsuccessful tenderers
  • communicate CAIP plan requirements with your contractors and sub-contractor
  • help Australian suppliers develop their capability and integrate into global supply chains

As the funding recipient, you must:

  • submit an implementation report to the government entity in the agreed timeframes (generally 14 months from the contract execution or financial close and every 12 months from then until all subcontracting opportunities are complete)
  • keep records of how you are implementing the CAIP plan and providing opportunities for Australian industry to compete for work and meeting the CAIP principles.

Examples include how you:

  • distributed supplier information guides
  • held information sessions
  • offered feedback to unsuccessful tenderers.
  • copies of excerpts from tender documents
  • standards for goods and services
  • pre-qualification requirements
  • sample work packages.

Records may also include:

The SmartForm system will send you and the government entity copies of the implementation report once it’s approved.

Contact us if you need help preparing your implementation report.

CAIP plan approvals and publishing summaries

When we approve a CAIP plan, the SmartForm system will send the funding recipient and the government entity copies of:

  • the approved CAIP plan
  • an executive summary
  • implementation report calendar reminder.

We will publish an executive summary of the CAIP plan on our website once the funding recipient has approved it.

Feedback and complaints

To give feedback on CAIP processes and policy for Australian government funded projects (Commonwealth AIP) email commonwealthaip@industry.gov.au. 

If you have a complaint regarding CAIP processes or policy for your Australian Government funded projects, clearly explain the issue and give any relevant documents. If you make a complaint in person or by phone, follow it up in writing.

We will record and investigate your complaint and give a detailed response. If you’re not satisfied with our response, you can contact the Commonwealth Ombudsman.

More information

Find CAIP summaries for current Australian Government funded projects
Find out how the Australian government is maximising opportunities for Australian industry to participate in government funded projects through the Buy Australian Plan
Complete the CAIP plan self-assessment form (SAF)
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